Crowdfunding Options for Entrepreneurs and Small Businesses

By SAMUEL K BURLUM

July 17, 2018 at 6:07 PM

By SAMUEL K BURLUM

July 17, 2018 at 6:07 PM

Source: Many small start-up businesses and tech ventures in search of capital turn to popular online platforms for crowd fundraising of financial resources to get their concept off the ground and launched into market. Indiegogo, Kickstarter, and GoFundMe, to name a few, offer solutions in generating cash to fund new ideas. How do you get people to contribute to your cause? Sam Burlum takes a look at some of the most effective crowdfunding techniques.

In the last decade, there have been a number of crowdfunding platforms that offer a menu of fund raising options, including the launch and growth of Indiegogo, Kickstarter, and GoFundMe. A potential campaign contributor can find a variety of crowd fundraising campaigns that range from an inventor who is in search of a few thousand dollars, to a large, corporate-backed venture that is accepting pre-market orders for their new value creation. Each platform specializes in their own niche offering, and provides a formatted recipe for what works in getting campaign contributions.

For instance, Indiegogo mandates that campaigners build and maintain a very aggressive plan that engages with multiple audiences from the campaign’s inception. As a part of the Indiegogo playbook, campaigners must make weekly posts and provide monthly updates for campaigns that have transitioned from either a 30 or 60 day campaign to their long term product called InDemand. Indiegogo shares that campaigns must include video and photo content as part of their message in sharing their offering with potential contributors.

Kickstarter is also a leader in assisting with the introduction of innovative products and new books, music and other forms of art to market. What makes Kickstarter so successful for some entrepreneurs are the tools available that Kickstarter offers to promote their campaigns. Crowdfunding campaigns that have the highest rate of success with Kickstarter are those that offer something that is new, solve a problem, and offer something practical that people are willing to buy. Most products presented on Kickstarter are beyond concept and are ready for manufacturing and delivery. Kickstarter has helped products get more traction online, and has served as an interim online e-commerce site for product sales while entrepreneurs are setting up a permanent place to market their value proposition.

Most people use GoFundMe as a social cause donation site. For many individuals and groups needing only a few thousand dollars of funding for a personal project, GoFundMe has become the crowdfunding platform of choice. From setting up and taking donations for a funeral, to sponsoring a local sports team which is trying to obtain funding so they can travel to an event, GoFundMe has provided millions of individuals and non-profits the ability to quickly gather up a few extra dollars in a time of need.

So what are some of the most effective practices for marketing your crowdfund project? When marketing to potential funders, social media has become the mainstay platform to inform your audience of close friends and connections about your cause or value proposition. Facebook gives you an opportunity to spread the word to your friends, family, and extended connections. To get a better reach of your program, you can ask and encourage your network to share your post, and provide feedback about the reason why they chose to help your campaign. If you desire to connect with professionals in a specific industry, Linked-in provides the ability to syndicate and share your post with people from several related market segments. You can also promote your campaign through Twitter and Instagram, redirecting raving fans to your campaign page.

So what will donors get for their money? A donor should have the ability to choose perks in return for their donation, especially if the campaign is not solely philanthropic. “Perks” are the benefits that an individual can expect in return for the donation. The more creativeness and value you can squeeze into each perk package, the more you can request per perk level. By adding in a free copy of a book or promotional materials, you can provide additional added value for your donors. “Perks” are generally pre-orders for the specific market product you desire to launch. You can, however, provide add-ons for each level of donation.

Two methods you can employ for increasing how many people see your perks are: 1) holding a contest for most shares of your post with friends on social media, and 2) asking people that are not in a position to contribute to your campaign to help by spreading the message about your campaign story with people they feel would be interested in your project.

Having a few endorsements either by written or video testimonial will provide additional credibility to your offering. You can ask satisfied customers to give testimonials, or, if you know a celebrity, sports figure, or public figure, you can ask them to share a few words about your project, edifying the project and the product.

Lastly, you must monitor your results on a daily basis and make campaign adjustments accordingly. Having the ability to tweak your project’s campaign as you obtain feedback from donors will help you make changes to your campaign and provide updates that may increase traffic to your campaign’s page. Most crowdfunding campaigns can extend as long as 60 days, thus giving you time every few weeks to add to your campaign content and promote it online.

Samuel K. Burlum is an Investigative Reporter and Journalist, who authors articles related to economic development, innovation, green technology, business strategy, and public policy concerns. Samuel K. Burlum is also a career entrepreneur, who currently lends his expertise as a Consultant firm to start-up companies, small businesses and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management, and systems integration. He is also author of the books, “The Race to Protect Our Most Important Natural Resource-Water,” and “Main Street Survival Guide for Small Businesses.”

The opinions expressed herein are the writer's alone, and do not reflect the opinions of TAPinto.net or anyone who works for TAPinto.net. TAPinto.net is not responsible for the accuracy of any of the information supplied by the writer.

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